The Invoice Management System (IMS), which allows the taxpayer to take action on each and every invoice reflected in IMS, has been made live on the GST Portal with effect from 14th October 2024. Considering the fact that the IMS is a drastic change in the manner of filing of GST returns, the GSTN is issuing instructions and advisory regularly to help the taxpayers understand the IMS properly and ensure smooth implementation of the same.
The GSTN has issued the following advisory on the First phase of implementation of IMS and the Supplier view of the IMS dashboard on the GST portal
1. First phase of implementation of IMS:
- The IMS window was made live on the GST portal from 14th November 2024 to October 2024. However, such a facility is still an optional facility. Therefore, the taxpayer can file the GSTR-3B without taking any action on the IMS invoices.
- The invoices reflecting on IMS can be accepted, rejected, or kept pending by recipients.
- Based on the action taken by the recipient on the IMS, the system will generate the GSTR 2B of the recipient on the 14th of the subsequent month.
- The Taxpayer can accept/reject/keep pending the invoice/record on IMS after due verification from his accounts. The ITC for the rejected record will not be available to the recipient in the GSTR 2B.
- Further, the Output and ITC are being auto-populated in GSTR 3B of the taxpayer based on his liability declared in GSTR 1/1A and ITC made available in his GSTR 2B. However, the taxpayer can presently edit the said auto-populated details in GSTR 3B before filing the same.
Read More: GST Portal may facilitate revision of GST returns
2. Errors or mistakes while taking action on IMS invoice:
- IMS, being a new functionality, there may be cases where in the initial phase of implementation of IMS, the recipient may make errors or mistakes while taking action on the IMS.
- As GSTR-2B of the recipient will be generated on the portal based on the actions taken by the recipient on the IMS, any mistake in the action could result in incorrect details of ITC auto-populating in GSTR-3B on the portal.
- In such cases, the recipient can change the action on the IMS in respect of an invoice/record ( e.g. from rejected to accepted or vice versa) and can recompute his GSTR-2B at any time till the filing of GSTR-3B.
3. Advisory for Incorrect Actions
- Despite this, there may still be some cases, where the recipient is not able to correct the action taken on the IMS, resulting in the wrong auto-population of ITC in GSTR-3B.
- Therefore, during this initial phase, the taxpayers are advised that in such cases, if incorrect details of ITC/ liability are auto-populated in GSTR-3B on the portal, the taxpayer may before filing their GSTR-3B return, edit such wrongly populated ITC/liability to correctly avail ITC or pay correct tax liability based on the factual position as per the documents/records available with him.
4. IMS view of the supplier
- To facilitate the taxpayers, the Supplier View of IMS has also been made available on the GST portal. Therefore, the supplier will be able to view the action taken by their recipients on the records/invoices reported in GSTR-1/1A/IFF in the ‘Supplier View’ functionality.
- This will help a supplier to avoid any wrong action taken by the recipient taxpayer.
- Further, the below-mentioned records/invoices are not available in IMS for taking any kind of actions by the recipient but are visible in supplier view with the status as ‘No Action Taken’:
- Invoices Where ITC is not eligible either due to the POS rule or Section 16(4) of the CGST Act,
- Invoices attracting GST under RCM
5. Scenarios where GSTR-2B shall not be generated:
As per advisory issued by GSTN, as per the design of IMS, GSTR-2B will not be generated by the system in below scenarios:
- Quarterly Return Filers: In case the taxpayer has opted for the QRMP scheme (Quarterly filers), GSTR-2B will not be generated for the first and second months of the quarter.
Ex. For the quarter Oct-Dec, 2024, the quarterly taxpayer will get GSTR-2B for the December 2024 period only and not for October 2024 & November 2024.
- GSTR-3B Non-Filers: If GSTR-3B is not filed for a period then GSTR-2B will not be generated by the system for the following tax periods. Such taxpayers need to file their pending GSTR-3B in order to generate GSTR-2B on demand.
E.g. if the taxpayer has not filed GSTR-3B for September-2024, their GSTR-2B for October-2024 will not be generated. Once the taxpayer files their GSTR-3B for September 2024, they will be able to generate their GSTR-2B for October 2024 by clicking the “Compute GSTR-2B (OCT 2024)” button on the IMS dashboard.
Conclusion
IMS is a significant step in strengthening compliance under GST. The ability of the supplier to view the action taken by the recipient will allow it to take prompt action on the invoices reported in GSTR-1. This process will make ITC reconciliation more structured and prompt. However, there are concerns about the legal validity of actions within IMS and integration challenges with existing ERP/accounting systems, which need to be clarified.
